GSA to Offer Cost Analyses Of Projects

By Myron StruckNovember 17, 1984

With remarkable regularity, the General Services Administration has tried to find economical ways to provide office space for government employes, only to be shot down, either by the Office of Management and Budget during budget discussions or by the House or Senate oversight committees during annual authorization hearings.

While OMB usually cried "too much money" when GSA proposed new construction projects, Capitol Hill regularly complained that the options offered were too muddled and the choices to lease or build made by GSA unsubstantiated.

Now, to make a better case to those interested parties, GSA is developing "community-based" plans for the 13 major markets where about 78 percent of the government's office space is located. The plans will include elaborate 30-year costs analyses that will compare the alternatives of leasing versus new construction.

"It's not going to be a paper exercise," said Charline Keith, chief of staff to Public Buildings Commissioner Lester L. Mitchell. "We're looking for a more comprehensive way to make decisions." Mitchell was unavailable for comment this week, Keith said.

For the real estate community, the plans will emphasize that leasing is often not the most economical long-term alternative, and that some innovative ideas should be explored.

Al Iudiccello, director of planning for GSA's Public Buildings Service, is toying with the idea of expanding the "lease-back" system of having the government give a builder a property and then having GSA lease it back for a given number of years as federal office space. At the end of the lease term, the property reverts to the federal government.

Other alternatives under discussion include a "partnership" arrangement, where the private sector can take advantage of what Iudiccello calls "favorable tax provisions" to building and provide office space to the federal government or exchanging existing buildings for other property.

Iudiccello said that getting major capital markets into the process of helping own, develop and build federal facilities "will be to our advantage in the long run. We've got to show them that it can be profitable for both sides."

Targets for such cooperative projects in this area, Iudiccello said, include the proposed project behind the District Building on the Federal Triangle downtown and the proposed Southeast Federal Center at the Washington Navy Yard. Work on the community based plans will be completed later this year.

Is GSA, the government's landlord, trying to get out of the landlording business -- at least to some extent?

GSA has now began in earnest to turn over to federal agencies responsibility for the complete operation of headquarters buildings. Under the plan, agencies will perform day-to-day building operations and maintenance and make minor repairs. GSA will continue to own the buildings, on behalf of the federal government, and make major repairs.

So far, nine agencies have been given control of their headquarters buildings or complexes. In fiscal 1983-84, five agencies were involved in a test program, including the departments of Commerce, Justice, Labor and Transportation and GSA itself. Beginning Oct. 1, with the start of fiscal 1985, the departments of Agriculture and Housing and Urban Development joined the Federal Energy Regulatory Commission and the Central Intelligence Agency in running their own operations.

"The idea is to find out if it is as economical, and more pleasing, for agencies to run their own buildings," said Wolfgang Zoellner, assistant PBS commissioner for buildings management. Based on preliminary findings, Zoellner said, "tenants were happier with the services they were able to provide for themselves at the same cost, than the services we were providing."

A GSA inspector general's audit, released in September, shows that Labor Department officials generally thought they were getting better service than before, but officials at the Transportation Department and at GSA thought the performance was about the same.

For Sale: GSA is angling to sell a 3.5-acre tract of property adjacent to Allentown Mall on Branch Avenue in Prince George's County. The property, now an overgrown lot with a house on it, is zoned I-1 (light-industrial). The Air Force had planned a softball field there once, but never followed through with construction plans. No sales date has been set . . . . GSA also wants to sell an old Defense Department installation near Byrd International Airport in Richmond. It's going on the market Nov. 28. The 1.07-acre parcel has "the remains of building T-1337," a GSA sales brochure states. The old industrial plant was gutted by a 1981 fire.